[5][6] This gene encodes a transmembrane signaling polypeptide which contains an immunoreceptor tyrosine-based activation motif (ITAM) in its cytoplasmic domain.

The encoded protein may associate with the killer cell immunoglobulin-like receptor (KIR) family of membrane glycoproteins and may act as an activating signal transduction element.

This protein may bind zeta-chain associated protein kinase 70 kDa (ZAP-70) and spleen tyrosine kinase (SYK) and play a role in signal transduction, bone modeling, brain myelination, and inflammation.

Mutations within this gene have been associated with polycystic lipomembranous osteodysplasia with sclerosing leukoencephalopathy (PLOSL), also known as Nasu-Hakola disease.

[8][9] Pathological mutations of the TYROBP gene cause polycystic lipomembranous osteodysplasia with sclerosing leukoencephalopathy 1, a condition presenting as early-onset dementia.